REQUEST FOR PROPOSAL

FOR EMPANELMENT OF STATUTORY AUDITOR FOR A PERIOD OF 3

FINANCIAL YEARS FROM 2021-22 to 2023-24 FOR MILK UNION LUDHIANA

.

THE PUNJAB STATE COOPERATIVE MILK PRODUCERS’ FEDERATION LIMITED

S.C.O. No. 153-155, SECTOR 34-A, CHANDIGARH – 160022 PBX: +91 172 5041812-4, Fax: +91 172 5041856, www.verka.coop

REQUEST FOR PROPOSAL (RFP) DOCUMENT FOR EMPANELMENT OF CA

FIRM AS STATUTORY AUDITOR FROM 2021-22 to 2023-24 FOR MILK UNION

LUDHIANA

1. INTRODUCTION

The Punjab State Cooperative Milk Producers‟ Federation Ltd, popularly known

as Milkfed Punjab, came into existence in December 1973 to boost the dairy farming

in the state. The objectives of the Federation were to provide a remunerative market

to the Milk Producers in the State through value addition and effective marketing of

the produce. The other objective was to provide technical inputs to the milk

producers for enhancement of milk production.

Although the federation was registered much earlier, it took its current bigger

role, in year 1983 when all the milk plants of the erstwhile Punjab Dairy Development

Corporation Limited were handed over to Cooperative sector under Operation Flood,

to give the farmers a better deal and customer‟s better products. The setup of the

organization is a three tier system, Milk Producers Cooperative Societies at the

village level, Milk Unions at District level and Federation as an Apex Body at State

level. MILKFED Punjab has continuously advanced towards its coveted objectives

well defined in its byelaws. Currently Milkfed Punjab has around 7500 village milk

producers‟ cooperative societies, with over 4,00,000 members. These village level

cooperatives work under 11 district milk producers‟ unions with 10 milk plants having

a consolidated milk handling capacity of around 18,00,000 litres per day.

The Federation is mandated for the milk procurement aligned with quality

processing of milk & its products as well as marketing them under the brand name

“Verka”. A trusted brand, Verka has become a household name and bringing newer

products to the table to its loyal customers Milkfed has consolidated its brand

strength by not only retaining its unique quality features of the existing products but

has innovated and launched various new products.

The Federation also runs two cattle feed plants with a capacity of 500 MT‟s per

day, One Frozen Semen Station and One Fodder Seed Processing Unit. MILKFED

also manufacture different types of cattle feed like ISI Type II, High energy & By-

pass etc. to meet the diverse requirement of milk producers. Besides, Milkfed has

also introduced buffalo feed, which has rich fat contents and meets the nutritional

requirement of buffaloes.

The empanelment of Statutory Auditor will be for a period of 3 financial years

from 2021-22 TO 2023-24

2. AVAILABILITY OF RFP

The RFP document is available at MILKFED Punjab website

www.verka.coop. Prospective CA Firms desirous of participating in

this RFP may view and download the RFP document from the above

website. Cost of tender of Rs200/- (non-refundable) should be made

only through online mode i.e. Credit/Debit Card,NEFT/RTGS, Internet

Banking in favour of “The Punjab State Cooperative Milk Producer‟s

Ltd.” will be deposited alongwith the EMD.

3. SCHEDULE OF DATES :-

Sr.No Events Date

1 Date of issue of RFP 04.05.2022

2 Last date and time for Proposal

submission

Separately of Technical and Financial

Bid

18.05.2022 UPTO 11:00

AM

3 Date and time for opening of technical

bids 18.05.2022 AT 3.00 PM

4 Date and Time for opening of

Commercial Bids 01.06.2022 AT 2.00 PM

4. CATEGORIZATION AND MINIMUM FEES FOR MILK UNION LUDHIANA

Category Name of Units Minimum Fees

A

Milk Union Ludhiana

Rs.50,000/- p.a. plus

applicable taxes (Rupees

Fifty Thousand Only)

5. ELIGIBILITY CRITERIA:

Chartered Accountants Firms must qualify the following minimum criteria:

1

Number of full time partners associated with

the firm for not less than 5 years and shall be

member of the Institute of Chartered

Accountants of India

2

2 Turnover of the firm (Average of last three

years) F.Y 2018-19, 19-20 & 20-21) Rs 50 lacs per Annum

3 No of years of firm‟s existence. The firm

should have adequate Articles.

Not less than 5 yrs

4

Number of assignments of Statutory Audit of

Private/Govt/Semi Govt/Board/ corporation/

PSUs/Cooperative institutions having

turnover of not less than Rs.200 crore per

annum.

The experience of the firm preceding 5 years

shall only be considered. (1.4.2016 -

31.3.2021)

The experience of the CA firm in Statutory

audit in one Company/PSU/ Corporation/

Cooperative Institutions for more than one

year will be considered as one assignment

only.

However the Bank branch Audit

Assignments shall be not be considered for

this purpose.

At least 3 nos

5 The Firm should have Head Office/Branch

Office with in a radius of 100 km from Milk

Union Ludhiana

For minimum period of 3 years

(B) NON- ELIGIBILITY CRITERIA: Any Chartered Accountant Firm who has

already conducted the audit of Milk Union Ludhiana for last 3 financial years or

more than 3 financial years as on 31.03.2021, shall not be eligible to participate in

this e-tender.

6. EVALUATION CRITERIA FOR EMPANELMENT OF THE CHARTERED

ACCOUNTANTS FOR CONDUCTING STATUTORY AUDIT OF MILK

UNION LUDHIANA.

TECHNICAL EVALUATION: The evaluation criteria for selecting the Chartered Accountant‟s Firm is mentioned below:

Sr.No Evaluation Criteria Maximum Marks

1 Partners should necessarily be a member of 15

Institute of Chartered Accountants of India)

(2.5 marks for each additional partner for

above 2 partners, 2 partners with 10 marks).

2

The firm should have Articles (As per ICAI

records) to undertake audit work. 2 marks

per Article.

15

3

Number of professionally qualified staff

(with associate/fellow membership of ICAI :

2.5 marks for one member with maximum of

10 Marks. In addition, if firm has Cost

Accountant from ICAI for which 5 marks will

be given.

15

4 Turnover for last three years of the firm :

More than Rs.50 lacs and upto 75 lacs per

annum – 2 marks for each year

More than Rs.75 lacs and upto 1 crore per

annum – 3 marks for each year.

More than 1 crore and above – 5 marks for

each year.

15

5 Number of statutory audit undertaken during

the last 5 years in Govt/Semi Govt/Private/

Board/ corporation/ PSUs/ Cooperative

Institutions whose turnover is more than Rs

200 Crore. The Experience of the Firm in

one company for more than one year will be

considered as one Assignment only. (4

marks for each assignment & 8 marks for

having experience in above mentioned dairy

industry undertakings, to a maximum of 40

marks).

40

Total 100

The minimum qualifying marks shall be 70% on technical evaluation.

7. SUBMISSION OF THE PROPOSAL :

The interested firm shall submit the Technical and Financial proposal

duly bound and containing the index/table of content with all pages

numbered. The proposals may be submitted at e-tendering portal i.e.

www.eproc.punjab.gov.in on or before the scheduled date and time.

8. SCOPE OF WORK OF STATUTORY AUDITOR:

8.1 Certification of Financial Statements i.e. Balance Sheet, Profit and

Loss account along with schedules and annexure along with

certification of accounts of Milk Union Ludhiana.

8.2 Statutory tax audit in Form No. 3CA & 3CD under section 44AB of

the income tax act, 1961 along with Annexure for six parts of 3CA

and 3CD.

8.3 Whether Milk Union is maintaining proper records showing all particulars

including quantitative details and situation of fixed assets. 8.4 Fixed Assets: Whether these fixed assets have been physically verified by

the management at reasonable intervals, whether any material

discrepancies were noticed on such verifications.

8.5 Whether physical verification of inventory has been conducted at

reasonable intervals by the management; are the procedures of physical

verification of inventory followed by the management reasonable and

adequate in relation to Milk union and the nature of its business. If not, the

inadequacies in such procedures should be reported; whether Milk Union is

maintaining proper records of inventory and whether any material

discrepancies were noticed on physical verification and if so, whether the

same have been properly dealt with in the books of account.

8.6 Is there an adequate internal control system commensurate with the size of

the Milk Union and the nature of its business, for the purchase of inventory

and fixed assets and for the sale of goods and services.

8.7 Is Milk Union Ludhiana regular in depositing undisputed statutory dues

including provident fund, employees‟ state insurance, income-tax,goods &

service tax, cess and any other statutory dues with the appropriate

authorities and if not, the extent of the arrears of outstanding statutory dues

as at the last day of the financial year concerned for a period of more than

six months from the date they became payable, shall be indicated by the

auditor.

8.8 In case dues of income tax or or goods & service tax, cess and any other

statutory dues have not been deposited on account of any dispute, then the

amounts involved and the forum where dispute is pending shall be

mentioned.

8.9 Whether the Milk Union Ludhiana has defaulted in repayment of dues to a

financial institution or bank or debenture holders? If yes, the period and

amount of default to be reported.

8.10 Whether term loans were applied for the purpose for which the loans were

obtained.

8.11 Whether Grant in aid received by Milkfed/Milk Union from Govt. of

India/Govt. of Punjab under schemes of ASIDE/NPDD/NDP have been

properly utilized.

General Terms & Conditions for empanelment of Auditors/CA firms

Terms & Conditions

1. To carry out the Statutory Audit of Milk Union Ludhiana. For Statutory audit the

prospective CA firm will have to constitute a team headed by qualified

Chartered Accountant. The size of the team should be one CA plus two staff

members in case of Milk Union Ludhiana. This team will have to be stationed at

Headquarter of Milk Federation/Milk Union.

2. The Firm shall submit the proposal in two parts, 1st part comprising of

“Technical Proposal” and 2nd part will comprise of “Financial Proposal”.

Technical Proposal shall contain the list of all the documents as mentioned in

the RFP.The Proposals shall be signed by authorized person of the firm. All

pages of the proposal, where entries or amendments have been made, shall be

initialed by the person or persons signing the Proposal. All signatures on the

letters / certificates attached with the Bid document shall be dated suitable.

Financial Proposal shall quote the fees for each Verka Dairy separately. The

quoted fees shall be in the format of Base Fees + GST i.e. GST shall be shown

separately.

3. The Firm shall furnish, as part of its bid, a refundable EMD of Rs.10,000/- (Ten

Thousand Only) for Milk Union Ludhiana .

EMD should be made only through online mode i.e. Credit/Debit card,

NEFT/RTGS, Internet Banking. The technical bid will disqualify if EMD is not

submitted along with the technical bid. Unsuccessful firm‟s bid security will be

discharged / returned as promptly as possible but not later than 60 days after

the award of the contract to the successful firm. The EMD of the successful

bidder will be retained and converted into security.

4. The prospective firms, who will qualify the technical criteria, shall only be

considered for further evaluation of their commercial bids.

5. Technical bids :

a. The firm should be registered with the institute of Chartered Accountants of India & registered with the GST Authorities and operation for the last five years.

b. The Firm should have a minimum average turnover of 50 lacs per annum in

the last 3 years. Firm will need to submit the audited balance sheets, profit

& loss account statements and Income Tax returns for each of the last

three financial years.

c. A power of attorney in the name of the person signing the bid.

d. The Firm should have minimum 2 number full time partners associated with

the firm for not less than 5 years and shall be member of the institute of

Chartered Accountant of India.

e. Number of assignment of Statutory Audit of Private/Govt/Semi

Govt/Board/Corporation/PSUs/Cooperative institutions having turnover of

not less than Rs. 200 crore. The experience of the firm preceding 5 years

shall only be considered. The experience of the CA Firm in Statutory Audit

in one Company/PSU/Corporation for more than one year will be

considered as one assignment only. The Bank Branch Audit Assignment

shall not be considered for this purpose.

f. No Partner / Chartered Accountant employee of the firm has been held

guilty of professional misconduct by the Institute of chartered Accountant of

India.

g. The firms shall provide all the necessary documents, samples and

reference information as desired by the committee. The firms shall also

assist the committee in getting relevant information from the firms‟

references.

h. Depending on the evaluation methodology mentioned above, each

Technical Bid will be assigned a technical score (TS) out of a maximum of

100 points as per the Technical Evaluation Criteria. The minimum technical

score required to qualify for the financial evaluation is 70.

i. Seeking clarifications cannot be treated as acceptance of the proposal.

Evaluation Committee may seek any additional information in writing which

has to be supplied by the firm is writing. For verification of information

submitted by the firms, the committee may visit firm‟s offices.

j. Evaluation Committee may, at its discretion, call for additional information

from the firm(s). Such information has to be supplied within the set out time

frame, otherwise Evaluation Committee shall make its own reasonable

assumptions at the total risk and cost of the firms and the proposal is liable

to be rejected.

6. Financial Evaluation (For empanelment of firms):

a) Financial Proposals of only those firms would be opened who qualify the

technical evaluation. The financial proposals of all unqualified firms would

not be opened.

b) The commercial scores for each of the firm will be calculated as follows:

Fn = Fmin / Fbid * 100

Where

Fn = Normalized financial score of the firm under consideration

Fbid = Evaluated cost for the firm under consideration

Fmin = Minimum evaluated cost for any firm

c) Final evaluation would be done using Quality and Cost Based Selection

(QCBS). An overall score will be calculated based on the technical and

financial scores of each firm as detailed below.

Bn = (Wtech * Tb) + (Wfin * Fn)

Where

Bn = Overall score of firm under consideration

Tb = Absolute Technical score for the firm under consideration

Fn = Normalized Financial score of the firm under consideration

Wtech = 0.70

Wfin = 0.30

7. The Auditors should intimate their acceptance of the Audit/Inspection assigned

to them, within a week of receipt of the appointment letter from the Milkfed.

8. The auditors shall act with independence, integrity and objectivity. They shall

undertake all audit works with an independent open mind and shall not come

under any influence of anybody In case of direct or indirect association with any

unit of Milkfed or its affiliated Milk Unions in any capacity, it should be disclosed

in the application for empanelment.

9. The firm has to give declaration that no partner/Chartered Accountant employee

of the firm of auditors has been held guilty of professional misconduct by the

Institute of Chartered Accountants of India.

10. The firm has to give a declaration / undertaking that :

a. The audit team shall consist of Minimum staff as mentioned in eligibility

criteria, of which one should necessarily be a partner of the firm. The audit

would not be done by a person who is neither a partner nor an articled of the

CA firm to which the audit has been allotted.

b. The partners, employees and other personnel of the firm will not divulge any

information that has come to their possession during the course of audit to

any person other than the authorized officials of the Milkfed and its affiliated

Unions.

11. Empanelment with the Milkfed does not automatically guarantee assignment of

audit. Assignment of audit would be done, as per the requirements of the

Milkfed.

12. The firm(s), which fulfill the empanelment criteria would be short-listed and

empanelled for the financial year 2021-22 to 2023-24. The decision of the

Managing Director, Milkfed Punjab, regarding the selection, constitution and

size of the panel would be final.

13. In case of any change in the constitution of the firm on account of merger, de-

merger or for any other reason the same would be brought to the notice of the

Milkfed.

14. The appointment of statutory auditors shall be subject to approval of

BOD‟s/AGM of Milkfed.

15.

a) The firm will quote lump sum fee to be payable by Milkfed, Punjab inclusive

of all. All taxes/statutory deductions/ TDS will be deducted by the

Federation as per the provisions of Income Tax Act, 1961.

b) If at any later stage the anomaly surfaces the agency will be held

responsible for the financial implication, which includes imposition of

penalty and withholding of the dues of the agency, apart from other legal

remedy.

c) The selected firm has to become nominal member of Milkfed as per

Milkfed‟s bye-law clause 5.2, after deposit of membership fee of Rs.1000/-

(One Thousand Rupees only) once for all (non-refundable) along-with the

prescribed format.

d) “In the event of any difference or dispute having arisen out of any contract

or agreement at Milkfed level/union level the same shall be referred to the

Registrar, Cooperative Societies, Punjab to decide the dispute himself, or

transfer it for disposal to any officer not below rank of Deputy Registrar,

Cooperative Societies, Punjab for dispute resolution by the arbitrator. The

provision of the Punjab Cooperative Societies Act, 1961 and rules, 1963 as

amended up to date shall apply to arbitration proceedings which shall be

held in the office of designated Arbitrator”

e) The Court of Chandigarh will be jurisdiction for any dispute arising out of

these contents.

f) The firm shall have to execute an agreement with Milkfed on non-judicial

stamp paper worth Rs.100/- upon selection as per Annexure-II.

16. QCBS for Statutory Auditors will be made for Milk Union Ludhiana. The Firm

may quote fees/rates on yearly basis as required in annexed Performa for financial bid. The approximate turnover for financial Year 2020-21 of Milk Union Ludhiana is Rs 794.48 Cr.

17. Removal/de-empanelment of auditors:

Milkfed reserves the right for the removal/de-empanelment of any auditor/firm,

in case work is not found satisfactory or there is any breach of

contract/misconduct by the firm with a prior one month notice in writing.

ANNEXURE –I

STATUTORY AUDITORS/AUDITOR FIRM’S LETTERHEAD APPLICATION FORMAT FOR EMPANELMENT AS STATUTORY AUDITOR

The Managing Director, Milkfed, Punjab, Chandigarh. I/we hereby apply for empanelment Statutory Auditor and furnish hereunder the requisite bio data / information / documentation for your consideration:

1. Name of the Applicant

2. Constitution Individual / Proprietorship / Partnership Firm

3. Firm‟s Details

3.a Address

3.b Phone No.

3.c Email

3.d Date of establishment

3.e Membership/ affiliation details with Institutes of Chartered Accountants of India

Name of the Body

Membership Since

Membership Type

Membership No.

3.f Firm‟s PAN / TAN

3.g Practicing as auditor since

3.h Details of present set up / infrastructure available to deal with statutory audit works

3.i Details of existing empanelment

3.j Names of proprietor / all partners (also mention managing/key/senior partner)

1

2

3

4

4. Gross Income in last three years

5. Details of Branches, if any, contact Nos, of branch, Name of the person-in-charge of the branch.

Undertakings / Declarations: a. I/We have gone through the RFP document for the empanelment of CA and

scope of work mentioned therein and undertake that [strike out which is not

applicable]I/we/none of our employees are ex-employees of your Milkfed, Punjab,

Chandigarh. OR I/… of our partners/… of our employees was/were ex-employees

of the Milkfed (give details, viz. Name, Position and Date of

retirement/resignation) but ceased to be under your employment, since last 3

years AND I/We shall not induct/employ any partner/employee during the tenure

of our empanelment as an Auditor who is/are within the above mentioned period

of 3 years from the date of retirement/resignation.

b. I/We do hereby solemnly declare and affirm that:

i. I/We have not been removed/dismissed from service/employment earlier,

ii. I/We have not been convicted of any offence and sentenced to a term of

imprisonment,

iii. I/We have not been found guilty of misconduct in professional capacity,

iv. I/We have not been convicted of an offence connected with any proceeding

under the I.T. act 1961 &/or W.T. Act 1957 &/or G.T. Act 1958,

v. I/We am/are not undischarged /insolvent(s),

vi. There are no complaints against me/us, registered with

CBI/SFIO/Police/Courts of law

vii. I/We have not been blacklisted/depenalled by any

Company/Bank/FI/IBA/others in the past.

c. I/We solemnly declare that the information furnished above is complete and

entirely true and Nothing has been concealed. I/We also affirm that terms &

conditions of Milkfed, Punjab relating to empanelment of Statutory auditors are

acceptable to us and I/We also undertake to keep Milkfed informed of any events

/happenings which would make me/us ineligible for empanelment / remaining

empanelled as statutory auditor.

d. Additional information, if any

For & on behalf of …………………………….. (Firm) (Signature) (Signature) (Signature) (Signature) Name Name Name Name Designation Designation Designation Designation [All partners to subscribe their signatures]

Date: Place: Self-attested documents to be provided along with the application: 1. Identity and address proof of the applicant Statutory Auditors firm/proprietor/all

partners.

2. Copy of registered partnership deed (in case of partnership firms).

3. Copies of PAN/TAN Card of the applicant Statutory auditor/proprietor/all

partners.

4. IT returns of last 3 financial years.

5. Copies of empanelment with Controller and Auditor General of India (CAG) as

Auditor/proprietor/ partners.

6. Evidences of professional qualifications and experience of the applicant

statutory auditor/proprietor /all partners.

7. Evidences of experience as a Statutory auditor.

8. Evidences of existing empanelment, if any, with other companies in Government

Authorities/departments etc.

9. The firm should be Registered with the Institute of Chartered Accountant of India

and with Goods & Service Tax –Registration Certificate.

ANNEXURE –II [To be executed on non-judicial stamp paper worth `100/- upon selection by

Empanelment Committee and name of selected Statutory auditor will be enlisted only upon

execution]

AGREEMENT WITH THE STATUTORY AUDITOR ON THE APPROVED PANEL This Agreement made at …………………………….. on this ………. day of

……………………… 20__, between

__________________________________________________of________________

(hereinafter called the „Statutory Auditor‟) of the One Part and The Punjab State

Cooperative Milk Producers‟ Federation Ltd., Punjab, herein after referred to as

Milkfed Punjab, India, having its Head Office at SCO 153-154, Sector 34A,

Chandigarh and offices at different places (hereinafter called Milkfed, which term

shall unless repugnant to context include its successors and assigns) of the Other

Part. Whereas on the request of the Statutory Auditor, Milkfed, Punjab has

empanelled the Statutory Auditor to undertake audit of books of accounts of Milkfed

and other service in the nature of opinion/advise/consultancy/certification, as may be

requisitioned by Milkfed from time to time.

Whereas the Statutory Auditor has agreed to render his/her/its services inter-alia on

the terms and conditions mentioned hereunder;

NOW THIS AGREEMENT WITNESSETH AS UNDER: 1. That the Statutory Auditor agrees to undertake audit of books of accounts as per

requisition made by Milkfed, from time to time, through job specific letter of

engagement/assignment, with terms of engagement and accept fee as

prescribed / decided by Milkfed.

2. That the Statutory Auditor shall not sub-contract the work, when requisitioned by

Milkfed, to any other auditor.

3. That the Statutory Auditor will personally inspect the books of accounts and

relevant documents in respect that in connection with the audit of the same.

4. That the Statutory Auditor shall maintain secrecy of Milkfed and their

assets/liabilities.

5. That the Statutory Auditor shall act with independence, integrity and objectivity

and shall not come under influence of anybody.

6. That the empanelment does not carry assured engagement/appointment of

Statutory Auditor and it is Milkfed‟s prerogative to engage the services of the

Statutory Auditor from the panel.

7. That in case constitution of the Statutory Auditor undergoes any change, the

same shall be informed to Milkfed immediately.

8. That if for any reason whatsoever Milkfed Punjab may not maintain any panel or

discontinue the panel, the Statutory Auditor shall have no grievance against

Milkfed and Milkfed shall to be liable in any manner whatsoever.

9. That in case services of Statutory Auditor are not found satisfactory and their

audit reports are unworthy of being acted upon, Milkfed may delist/de-panel the

Statutory Auditor‟s name from the approved panel of Milkfed after issuance of

show-cause notice.

10. That Milkfed Punjab reserves the right to take appropriate legal action including

filing / lodging complaint to the professional body, if there is any misconduct on

the part of the Statutory Auditor or audit report submitted by the Statutory

Auditor to Milkfed is incorrect or false. This shall be without prejudice to Milkfed‟s

right to delist/de-panel the Statutory Auditor from its panel.

11. That the Statutory Auditor agrees and hereby gives consent to exchange

information with other parties directly or through the other medium about

particulars (name, address and other details) of Statutory Auditor, performance

as well as cause for delisting / de-paneling, if any.

In witness whereof, the parties hereto have set their hand on the day, month and year mentioned herein above. _________________________ Statutory Auditor (signature with Membership/Registration No.) [In case of partnership firms all the partners to subscribe their signatures] For The Punjab State Cooperative Milk Producers Federation Ltd _________________________ Authorized Signatory

PROFORMA FOR FINANCIAL BID

Financial bid for empanelment as the Statutory Audit for a period of 3 financial

years from 2021-22 to 2023-24.

Particulars Amount in Rs

Statutory Audit fee on yearly basis

Fees for empanelment of Statutory auditor for : Verka Ludhiana Dairy

Goods & Service Tax

Total

Note: 1. Taxes and other statutory levies will be paid on actual basis. However present

rates of applicable taxes and levies may be indicated by the tenderer.

2. TDS will be deducted at the applicable rates. 3. The tender is deemed to have thoroughly studied and examined the technical

specifications, important instructions and general terms and conditions of the tender documents.